1. Explain how Domino's strategy differed from its competitors.
2. Has the firm been able to achieve a long-term strategic fit between its strategy and HR practices in your opinion? Why or why not?
Believe it or not, years ago it was normal for people to have wait an hour or more to get their pizzas delivered. But those were the years B.D.-before Domino's. Started by Tom Monahan and his brother in Ypsilanti, Michigan, in the 1960s, Domino's created a value proposition people were hungering for: Pizza delivered in 30 minutes or less. Better yet, if a Domino's pizza wasn't delivered in 30 minutes, it was free. That was unheard of in the pizza business. Monahan changed the pizza industry not because Domino's created a better product but because it was able offer a different value proposition than anyone else was offering and as well as align its people, processes, and systems to deliver against that promise. Domino's used assembly line-based systems and standardized processes to improve efficiency and reduce pizza preparation times. For example, it was the first to use conveyor-belt oven technology to ensure uniform temperatures and reduce baking times. Domino's also translated its strategy into HR deliverables by emphasizing and encouraging fast pizzamaking and delivery. Annually the company holds a "World's Fastest Pizza Maker" competition in which its pizza makers compete for cash and other prizes. As important as what Domino's did is what it did not do. Strategy is about making choices. Domino's did not focus on great pizza-it focused on fast pizza. It did not customize every order but prepared them all in advance. It didn't hire premiere pizza chefs who tossed pizza dough into the air to make lighter crusts. an old-world taste. And it didn't offer in-store dining. Each of the ingredients in Monahan's formula was aligned around its value proposition of fast delivery-a strategy that worked well for Domino's for decades. This strategy and a franchise model helped the company grow by leaps and bounds. Today there are over 10,000 Domino's pizza stores, which are located in 70-plus countries around the world. Over time, however, Domino's competitive environment changed. Other companies began delivering pizzas in about 30 minutes, and consumers began wanting more than fast pizza: They wanted good pizza. The problem was that Domino's wasn't delivering on that score. In taste tests, customers complained
Domino's pizzas tasted like cardboard. At one point, the firms' customer-satisfaction scores in terms of its food and service were lower than any other pizza chain. Perhaps not surprisingly, the firm's stock price reflected as much. To turn things around, the company had to rethink its value proposition. That included revamping not only its food but its HR strategies and policies. One problem Domino's suffered from is rampant in the fast-food industry: employee turnover. Domino's turnover rate was 158 percent annually. In other words, for every employee hired during a year another 1.5 employees quit. Domino's CEO at the time, David Brandon, wasn't convinced that higher pay for hourly-wage employees was the solution though. "If we could have increased everybody's pay 20 percent could we have moved the needle a little bit to buy some loyalty?